Is Monsanto Worthless?

The campus of the FDA's Center for Food Safety and Applied Nutrition is under siege today, and it has everything to do with Monsanto (NYSE: MON) . Members of the Occupy Monsanto movement are staging an all-day "eat-in" to label food products that contain genetically engineered (GE) ingredients. They're easy to dismiss, like an especially curmudgeonly Facebook commenter who described them as "hordes of crazed, anti-Monsanto, vegetarian hippies" did. That may well be true, but they are part of a broader movement that could pose a challenge to ag biotech's comfortable dominion over our food supply.

Label it There is a growing movement among grassroots activists, NGOs, and natural and organic food companies to require labeling of food products containing GE ingredients. Whole Foods (NASDAQ: WFM) , the leading natural foods grocer, recently committed to labeling all of its products voluntarily within five years. Big Food companies spent heavily on campaigns against a proposition in California that would have mandated labeling and successfully torpedoed the bill. But there's more where that came from. Vermont, Connecticut, and Iowa all have some form of labeling requirement making its way through the legislative process.

The New York Times recently reported that 20 major companies, including PepsiCo, ConAgra, and Wal-Mart, met in Washington, D.C., to lobby the FDA for a federal GE-labeling law. The idea is that companies prefer one federal law to a proliferation of state laws that would add to their compliance burden. Implicit in that notion is that a labeling requirement is inevitable.

All three branches of government? The Supreme Court heard arguments on Feb. 21 in the case of Bowman v. Monsanto Co. The central question is whether farmers who buy Monsanto's Roundup Ready soybean seeds are free to do as they wish with the seeds harvested from those plantings. The justices seemed almost unanimously opposed to the farmers' arguments, and they appear poised to rule in Monsanto's favor. In a highly unusual move, the U.S. government not only filed an amicus brief supporting Monsanto but also sent a government attorney to argue on the company's behalf, highlighting the Obama administration's support for several elements of Monsanto's argument.

In March, Congress passed and President Obama signed H.R. 933, a law that anti-GE advocates have dubbed the "Monsanto Protection Act." Section 735 strips federal courts of the authority to halt the sale and propagation of genetically modified seeds and crops if concerns about health risks arise during safety tests. Did you catch that? Let's pretend we're talking about cribs instead of seeds. The corollary law would then say that if little babies' fingers kept getting chopped off in crib safety testing, the courts couldn't get involved. Disgraceful.

Senator Roy Blunt (R-Mo.), one of section 735's biggest supporters, worked with Monsanto to craft the language in the bill. Section 735 is attached to a continuing resolution that only holds for the next six months, so it is not yet a part of permanent federal law. Monsanto euphemistically calls section 735 the "Farmer Assurance Provision." As with the Supreme Court case, this legislation could have broad implications for agricultural biotechnology companies, especially if it becomes part of permanent federal law.

Effectively, Monsanto may have all three branches of government in its hot little hands. You might be inclined to admire this, especially if you're just focused on stock price. Indeed, if you'd bought shares on this day 10 years ago, you'd have enjoyed a nifty 31% annualized return. Not too shabby.

BattlestationsMany activists are concerned about the extent to which a small number of corporations control the majority of the world's food production capacity. The Center for Food Safety points out (link opens a PDF) that three companies -- Monsanto, DuPont (NYSE: DD) , and Syngenta (NYSE: SYT) -- control 53% of global commercial seed production. They do this on the strength of GE technology.

Activist shareholders are pushing back. According to the Sustainable Investments Institute, shareholders have filed GE-related resolutions with Monsanto, DuPont, and Kraft (NASDAQ: KRFT) . These resolutions aren't yet enough to alter fundamental business strategies. The resolution filed with Monsanto this year only garnered 7.6% of the vote, up from 5.7% in 2012. DuPont's annual meeting is forthcoming, but the 2011 resolution won just 6.3% of votes. Kraft has a GE-related proposal on its proxy statement for the first time, scheduled for vote at its annual meeting on May 22. But the number of these resolutions is on the rise, and it's becoming harder for companies to ignore them.

Safe? Probably. But smart? The debate over GE technology makes a Tyson-Holyfield fight look like afternoon tea. I don't have the stomach for the back and forth, so here's my quick summary of how the playing field looks so far: GE technology does not appear to be harmful to human health, and while it's doing some funky things out in the environment, none of those are dire. While it's still in the super-early days, the doomsday prognosticators got it wrong.

But that's not really what I'm worried about.

The Nature Biotechnology journal published an interesting study this February. It found that several varieties of GE seeds actually reduce yields when compared to conventional counterparts. Researchers analyzed 20 years of data from test plots to reach their findings. If this holds true more broadly, it undermines the biggest case for GE technology.

The New York Times' Mark Bittman asked a fascinating question in a recent Op Ed: Why does genetic engineering need protection? Maybe because it's not that awesome. Bittman points out that in 20 years of applied genetic engineering to crop science, there've only been two real successes: crops resistant to Roundup and crops that produce their own insecticide. The first has already failed and the second appears to be headed down the same path. Other than that, it's pretty mediocre.

Might we be facing a case of tremendous risk with little real return on a massive scale? If the world wakes up one day and realizes that Monsanto's emperor has no clothes, what will its shares be worth then?

I'll stick with Whole Foods, thanks. It's hard to believe that a grocery store could book investors more than 30 times their initial investment, but that's just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this brand-new premium report, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. So make sure to claim your copy today by clicking here.

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When it comes to Monsanto (and other companies which manufacture and promote GMOs), the people - investors in particular - should be aware that these companies and its products directly affects each and every living being on this planet. If that is the case how can it be a good investment. How can it be a good investment if affects what your kids/grandchildren eat and inhale.. Get awareness of the ill effects of GMOs.

#1 Mr. President promised that he will label GMOs in our food. Here is the proof! But he back tracked!

Whole Foods never had a problem with GM food until it perceived an economic threat, due to not supporting labeling. They're so worried about the health risks that they're taking 5 years to fully implement their labeling.

One of the greatest threats to human progress is basing policy on fear. I'll stick with the best available science.

we dont need activist crap here just thrown back at us from the internet. Monsanto stock price has grown 700% in 10 years and 10 years the same complaints were there and they are not true. Not a single health complaint from GM food, but 3,000 a year to the FDA about food supplements - now who is problem here? who is the fool? Thw writer of this or a Monsanto investor ? who has seen 50% growth in the last 6 months? The activists have lost in every court case and they re supported by a few millionaires who make their money from organic food - who is the liar and the cheat? Who is folling the public with their overpriced products that can't be advertised as healthier? Who gains when GM food is bashed ? the organic industry - that's the real story

A great deal of damage has been done to food product brands that use GMO ingredients. These brands have a lot of work to do to regain the lost trust and goodwill necessary to their businesses. They are already beginning to act in their own interest, which necessitates meeting the consumers growing preference for non-GMO products.

This article is so pretentious and simplistic. What is the point? Do you really think that hundreds of thousands of farmers all over the world would be using these seeds if they didn't benefit them? Do you really think over fifteen years of use by these farmers is erased because some hack at the NYT says they are valueless? I spent most of my life in agriculture and a good deal of that in biotech development. I have sat with small holders in Africa and listened to them tearfully proclaim how Bt cotton has allowed them to bring in a paying crop for the first time. I have walked countless fields all over the world where crops were previously choked out by noxious weeds or destroyed by insects and are now bringing in bumper crops. Are not huge reductions in insecticide applications or huge increases carbon remaining safely sequestered in the soil not tangible benefits? Why would an investment advisor be spewing this kind of radical bilge about GMO's??

Fact - [No. Infact they are killing them. In india 95% cotton sowed is BT cotton (the one from Monsanto). You should no that it has caused new pests to surface and also reduction in yield. Infact it is playing havoc in India.]

Fact - GMOs are contributing to increased use of pesticides. In facts that is what companies want! They can make money of the seeds and they can make money on the pesticides as well!! Do you think companies like monsanto want to help farmers and eradicate poverty. All they want is to make money! Please go and check your facts. These were the companies which once said DDT/agent orange are fine! Sir - We are being doomed.. and the people fighting back are so small in number..

bees are vanishing

butterflies are lost

sparrows are gone

Food chain as we studied in school is meaningless

GMO companies are thinking that they can take over nature!

At this rate nature will take over and just flick man from this planet.

Our vegetables and fruit are about to be patented to grow Monsanto’s profits, making food more expensive and strangling the farmers we rely on everyday. But we can pressure European countries to step in and stop the corporate food attack. We have no time to lose -- up to 800 patents are in the pipeline waiting to be approved!

Hello I just wanted to add, Monsanto is one of the most disgusting companies on the PLANET! I love what you guys do here at the fool, But when i received an email discussing Monsanto shares, I was extremely disheartened. What would be even better that what you guys already do when it comes to generating income through trading, (which is simply amazing) Would be if you help to change the world by NOT encouraging investing in corporations that have NO benefit to the world other than GREED and POWER. Particularly like a company like Monsanto. The world will not change for the better if we continue to invest in these disgusting companies. If only people started learning to make money with more integrity behind it, and supported companies that help our planet and create a better existence for mankind. Monsanto is definitely not one..